St. Paul looks at vacant lots, envisions neighborhoods

Break dancing instructor Wong Thao (L), a community resident, teaches some steps to local neighborhood boys at a vacant lot at 246 Edmund Street in St Paul during a "lot Squat" an event used to urge city officials to get the lots and vacant properties banked to facillitate a community wide vision of what can be done with these lots. (Pioneer Press: John Doman)

For months, a rather unhappy Caty Royce has hosted weekly community gatherings on empty, city-owned lots in Frogtown.

The "lot squats" attract visual artists, break-dance instructors and spoken word performers as a way to call attention to what Royce considers an outrageous trend. She's hoping to persuade St. Paul to reconsider its "demolition-happy" approach toward tearing down foreclosed, vacant housing.

Relief may be in store for Royce, director of the Frogtown Neighborhood Association, and residents in four other neighborhoods where the city's response to the foreclosure crisis has left a sometimes uneven combination of empty plots and new housing in its wake.

St.

Paul wants to sell, rehab or build upon 240 vacant, foreclosed properties and empty lots within two years -- a $13 million effort that will require coordination of state and private funding, as well as neighborhood support.

The goal is to fill in empty spaces with single-family homes, duplexes and the occasional triplex.

The 42-page "Neighborhood Development Strategy," a plan detailing a four-pronged assault on empty lots and vacant houses, received the approval of the St. Paul Housing and Redevelopment Authority (HRA) in late July.

The effort seeks a full-court press in five neighborhoods -- Payne-Phalen, Frogtown, Dayton's Bluff, West Seventh Street and Railroad Island -- to address the empty spaces.

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"If we can get someone else to develop them, or build a house, then everyone's happy, including the neighbors," said city council member Dave Thune, who chairs the HRA.

"We bought a number of properties through foreclosures or from bad landlords with (federal) money, and we have to figure out how to resell these properties."

The effort is welcome news to John Vaughn, executive director of the East Side Neighborhood Development Co. The city of St. Paul has become a major property holder in his neighborhood, thanks to federally funded housing teardowns. But the lots are not selling fast enough, some say.

Ramsey County has unloaded much of its housing stock at a quicker pace by selling vacant lots at public auctions. Under St. Paul's more methodical approach, however, there isn't so much as a "for sale" sign in place.

Vaughn said his group counted 96 vacant lots around his East Side neighborhood, including about 45 owned by the city.

After reviewing more than 500 HRA-owned properties, city staff selected 240 to focus on, said Roxanne Young, the city's project manager.

Many are in neighborhoods already targeted for improvements through existing efforts that grew out of the recession and foreclosure crisis. The idea is to boost, not compete with, the market.

"Because our homes are rehabbed as extensively as they are, they help to increase demand in neighborhoods that are struggling," Young said.

The effort also helps with general home prices, she said.

"It shows that a three-bedroom house in Frogtown can sell for $140,000," she said.

The latest development strategies focus on vacant lots in clusters of 10 to 15 blocks in the targeted neighborhoods. The strategy envisions construction of homes -- rentals or privately owned -- on the lots.

To entice developers and lower the lot prices, the city is lining up financing on top of city funds. If approved, a $1.16 million grant application to Minnesota Housing Finance Agency would benefit at least 29 properties -- 17 home rehabs and 12 new residences.

The city also aims to fill vacant lots and rehab vacant homes already acquired with previous efforts. One of those is the Neighborhood Stabilization Program, for which the city has used stimulus money to acquire and demolish 86 vacant buildings since 2007, and rehab or construct 83 properties.

The goal is to build on, rehab or sell 60 lots within the next two years.

The city's plan includes strategies to sell vacant HRA lots outside the five target areas and implement new policies for "splinter parcels" -- lots that are too small to develop without a variance or have topography or other issues that would hinder development.

In Frogtown, Royce is hoping that the redevelopment strategies pay off after years of housing teardowns, and that her "lot squats" keep the pressure on the city to fill in empty spaces more quickly.

The city has rehabbed 17 Frogtown homes now occupied by residents, and five more homes are in the process, Young said. Twin Cities Habitat for Humanity completed construction of a property, as well.